In 2023, disabled military veterans and retirees saw an 8.7% increase in COLA, marking the most significant raise in the past four decades. By comparison, the increases in 2020 were under 1.7%, in 2021 under 1.4%, and in 2022 under 6%. Many veterans rely on their disability and retirement benefits to meet essential expenses like food, healthcare, and housing. Given the rising inflation that makes these items more expensive, the raise was a much-needed boost to their monthly finances.
How Much is the VA Military Disability Benefit Increase Going to Be for 2025?
The amount of the COLA increase in your military disability benefit for 2025 will vary based on your disability rating and the size of your family. According to the latest CPI index, inflation rose 2.5% over the last twelve months. When evaluating COLA rates the VA (and other federal agencies) uses the CPI index to determine future disability and retirement increases.
If you are a 60% disabled veteran with one child, you will see your $1,444.88 payment increase to $1,481. That's an increase of $36.12 monthly. Not to mention that this increase is tax-free at the 60% rating. Since inflation has decreased since 2023, this minimal adjustment may not cover much. It's more important now than ever for veterans to manage their family's grocery budget for the month.
I mention this because the most recent CPI index shows that food and energy inflation has increased 3.2% in the past twelve months. Therefore, the 2.5% raise may not meet a crucial living need.
Do you have additional children or a spouse? Here's an example:
$1,444.88 (veteran with 1 child)
+ 61.92 (additional child under age 18)
+ 199.18 (additional child over 18 in a qualifying school program
Total $1,705.98
You can use the same calculation to determine how much your monthly retirement pay could increase. If you are a retired military veteran and receive VA Disability pay, you could see even more income in your monthly budget to help you afford your monthly expenses.
Are you interested in a free, no-cost evaluation of your current disability rating? I used REE Medical to help guide me through the process to get me from 50% to 100% P&T! Check out my story here and start with your evaluation.
What Should You Do with Your COLA Increase?
There are a few things you can do with this unprecedented COLA increase. However, the first thing you should do is ensure that your basic needs are met. For example, ensure you have enough groceries at home and that your other physiological safety and security needs are taken care of. Then you can focus on other areas of your life that can put you in a better financial situation due to the COLA increase.
Here are a few things you can do with your COLA increase:
Adjust your budget for the new year to reflect the pay increase.
Save some or all of it for your future goals.
Pay down your outstanding debt.
Start an emergency fund.
Treat yourself, but not too excessively.
Whatever you do, and whatever the percentage of the COLA increase is, ensure that you manage it well.
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